INDUSTRY UPDATE
PROPERTY  
New residential sales (excluding ECs) fell 19% MoM to 1,371 units for the month of June 2012. It was the second consecutive monthly decline of new home sales. For 1HCY12, total sales tally hit 12,238 units, 68% of our full year estimate for 2012F.
Unchanged from previous months, sales composition remained lopsided in favor of mass market residences. Excluding ECs, 81% of total sales (an increase of 10% MoM) came from Outside Central Region (OCR). We noted that as the price gap between mass market homes and ECs widen, demand for the la''er has caught up.

Comparing YoY, ECs sold for 1HCY12 averaged 409 units per month, double over the same period last year. We think that as    prices of mass market homes border S$1,000 psf, a substantial price gap of 30% over ECs will sway eligible EC homebuyers away from private residences. Sales in Rest of Central Region (RCR) slumped to 9% (21% in May 2012) whilst Core Central Region (CCR) stood out at 10% (was 8% previously). It was a''ributable to the launch of two boutique development consisting of small units boosting a'ordability.

According to a media report, 46% of Singaporean homebuyers had commi''ed to a property within S$0.5'1mil in 1H2012. It was drastically higher than 26% in 1H2010 and 40% in 1H2011. We believe it signals the emergence of marginal buyers in the property cycle. HDB 'at dwellers had been able to tap on high cash over valuation in order to upgrade or commit to a second property. We think that the above may be detrimental for the property market as the government will be concerned about a spike in defaults arising from a crisis. We maintain our view that policy overhang will remain a dampener on property sales in 2HFY12F. Amidst our coverage, we advocate investors to switch to SingLand (S$9.60, BUY) for its sharp discount to our RNAV estimates and built' up of residential landbank for income diversity.

NEWS BUZZ


M1 (S$2.61) 
Q2 pro't down 17.7%
M1 has posted a 17.7% fall in 2Q net pro't to $35.2mil. For the quarter ended June 30, 2012, operating revenue also fell to $232.3mil because of lower handset sales. It declared an interim dividend of 6.6 cents per share. EPS stood at 3.9 cents for the quarter. M1 con'rmed that it would launch its 4G ' or long'term evolution (LTE)  '  services towards the end of the 3Q. "Tiered smartphone plans will be announced at the same time," it said. As at the end of the 2Q, M1 had 56,000 'xed services customers out of which 37,000 were 'bre customers. M1 estimates its current 'bre market share at 22'23 per cent.

K'REIT Asia (S$1.115) 
Q2 distributable income jumps 90%
K'REIT Asia's distributable income for the 2Q ended June 30 this year rose almost 90% year on year to $49.8mil, on the back of higher net property income (NPI) and stronger contributions from Marina Bay Financial Centre (MBFC) Phase 1 and One Ra'es Quay. This translates into a DPU of 1.94 cents, up 86.5% (after factoring in the e'ect of the fully underwri''en, renounceable 17'for'20 rights issue) posted back in 2Q11, or an annualised distribution yield of 7.3%. The Reit is currently in the midst of re'nancing $598mil worth of loans that are due to mature at the end of this year. Post'acquisition of an additional 12.4% stake in OFC, aggregate leverage stood at 43.9%. Unitholders can expect to receive their DPU payment for the 'rst half of 2012 on Aug 27, which will also be the 'nal time that distribution income will be paid on a half'yearly basis. Going forward, K'Reit Asia will pay its distribution income every quarter commencing from the 'nancial period ending Sept 30, 2012.

K'Green Trust (S$1.105) 
Q2 pro't hit by lower topline
K'GREEN Trust's net pro't dipped slightly in the 2Q12, to $4.3mil on the back of lower revenue contributions from two out of its three key segments. It posted 1H12 pro't after tax of $7.87mil, which translates to an EPS of 1.25 cents. Turnover for the period was 4.9% lower year on year at $41.96mil. Assets totalled $697.2mil as at June 30, 2012, $20mil less than at the end of the previous year. Adjusted NAV per unit also dipped 1.9% over the same period to $1.04. The trust continued to maintain its DPU of 3.13 cents for 1H12 despite lower earnings.

Source: The Business Times

Source: AmFraser